Monday, 29 December 2014

The Eurozone Scandal

Imagine that it was revealed that 10% of the European Union
budget (the money that goes to the EU centre to fund the common
agricultural policy and other EU wide projects) had been found to be completely
wasted as a result of actions by EU policymakers. By wasted I do not mean
spent on things that maybe it should not have been spent on (rich farmers,
inefficient farmers, infrastructure projects whose costs exceed benefits etc),
but literally money that went up in smoke. Imagine the scandal. Heads would
roll, and some might find themselves in jail.

10% of the EU budget is about 0.1% of EU GDP. Yet sums at least
ten times that figure are currently being wasted in the Eurozone, as a result of actions by Eurozone
policymakers. Here is the latest OECD assessment of output gaps across
eleven Eurozone countries, for both 2013 (blue) and 2014 (red).

A negative output gap means that output could be the amount of
the gap higher without raising inflation above target. Of course
Greece is a nightmare, and things in the other PIIGS are really bad, but the
output gap in the Netherlands is around 3%, in France over 2% in 2014, and even
in Germany the output gap exceeds 1%. Estimating output gaps is an imprecise
science, but gaps of at least this size are consistent with inflation well
below target (currently 0.3%). So output could be at least 1% higher across the
Eurozone with no ill effects. This is the equivalent of the entire EU budget going
up in smoke.

Sometimes negative output gaps are the result of shocks which
were not anticipated by policymakers (like the financial crisis). Sometimes
they are engineered by policymakers to bring inflation down. It is unfortunate
that these things happen, but they always have. However the output gaps we have
in the Eurozone today are neither of these. Instead they have been created by policymakers for no good
reason. That is why they can be called a scandal.

At this point you might think I’m being unfair. Surely this is
all about tight fiscal policy required to bring down government debt. I agree
that it is all about fiscal policy, and in particular the
crazy fiscal rules imposed within the Eurozone. However where is the urgent
need to bring down debt outside the periphery? The OECD estimate that the
primary structural budget balance in the Eurozone will be a surplus at around
1% of GDP in 2014 compared to a deficit in the OECD as a whole of just over 1%.
So even if you think that we need austerity to bring deficits down rapidly -
which I do not - why should policymakers in the Eurozone be doing this so much
more quickly than in the UK, US or Japan? To
achieve this goal, they are wasting resources on a colossal scale.

If you think anything has changed as a result of Juncker’s
‘E315 bn’ investment plan, you should read this post from Frances Coppola. As she makes clear,
there is not a penny of new EU money in this proposal. Instead money earmarked
for existing projects is being used to provide insurance to private sector
investment (which may or may not happen). There are so many issues with this
kind of stimulus. Besides those raised by Frances, there is also the question
of how to prevent firms simply getting insurance for schemes they would have
undertaken anyway, and how exactly will the Commission select when to allocate
its insurance. Those of a neoliberal persuasion who think government is bad at
spending its money cannot feel any more comfortable with the government
selecting what private sector projects to back. However a scheme like this will
come as no surprise to someone like George Monbiot, who thinks states are increasingly being used to
serve corporate ends.

Equally embroiled in this scandal are those making monetary
policy decisions at the ECB. Here I can simply defer to an excellent post by Ashoka Mody. In particular he points
out why it is misleading to simply look at the ECB’s balance sheet as an
indicator of the force of unconventional monetary policy. There is an important
difference between creating money to bail out failing banks, as the ECB has
done, and creating money to buy bonds to force down long term rates, which is
Quantitative Easing (QE). He argues that the “ECB is set to remain—by far—the
central bank with the tightest, most conservative monetary policy among the
major central banks.” I thought I would quote the following paragraph in full,
for reasons that will be clear to regular readers.

“Others play by the rules of the cognitive frame. Thus, despite
the serious concerns with the June 5th measures—documented carefully by my
Bruegel colleagues—journalists have no interest in asking ECB officials: “What
exactly are we waiting for?” The financial markets have no interest in public
policy: once the rules are set, they seek opportunities for short-term bets. On
July 9th, the International Monetary Fund’s Executive Board somewhat incredulously
concluded: “Directors welcomed the exceptional measures recently
taken by the European Central Bank (ECB) to address low inflation and
strengthen demand, as well as its intention to use further unconventional
instruments if necessary.” Belatedly, on November 25th, the OECD became a lone
official voice calling for more urgent steps.“

To those who say that QE, as operated by the BoE or Fed, would
have limited effectiveness in the Eurozone, I have a lot of sympathy. However
there is a relatively simple way of making QE much more effective and
predictable, and that is for central banks to create money not to buy financial
assets but to transfer directly to citizens, which Friedman called helicopter money. John Muellbauer calls this QE for the people. Conventional QE
involves buying a large amount of assets with potential losses for the central
bank (if the asset price falls) but uncertain effects on demand. Helicopter
money involves small transfers with a certain loss to the central bank but much
more predictable positive demand effects. [1]

As an institutional innovation, helicopter money has two major
drawbacks in countries with their own central bank. [2] First, why innovate
when you can implement exactly the same policy through existing means: in
macroeconomic terms helicopter money is equivalent to QE plus tax cuts when you have
inflation targeting. Second, a fiscal stimulus in the form of temporary
additional government spending is likely to be more predictable in its impact
than transfers or tax cuts, because you eliminate the uncertainty caused by how
much of the transfer or tax cut will be spent.

But if countercyclical fiscal policy is effectively illegal in
the Eurozone, these objections do not apply. QE for the people may have
additional legal merits within the Eurozone. The ECB is constrained to some
(uncertain) extent in its ability to buy government debt. But, as John
Muellbauer suggests, mailing a cheque to every EZ citizen using electoral registers
would seem to circumvent these legal difficulties.

One objection to the ECB embarking on ‘QE for the people’ is
that it goes well beyond the remit of a central bank. [3] Yet the ECB appears
to have no qualms on that score: besides routine references for the need for fiscal
consolidation and ‘structural reform’, the letter discussed by Paul De Grauwe here shows the ECB requiring detailed changes
to labour market regulations and institutions in Spain. So you have to ask why is it
OK for the central bank to override the democratic process in this way, but
giving money directly to the people is somehow beyond the pale.

If you think that mailing a cheque to every voter in the
Eurozone as a solution to continuing recession sounds too good to be true, then
you have just rediscovered why recessions caused by demand deficiency when
inflation is below target are such a scandalous waste. It is a problem that can
be easily solved, with lots of winners and no losers. The only reason that this is
not obvious to more people is that we have created an institutional divorce between monetary and
fiscal policy that obscures that truth. It was a divorce that did a reasonable
job in steering the economy in normal times, and it might discourage fiscal
profligacy when demand is strong, but since 2010 it has led to a scandalous paralysis
in the Eurozone.

[1] These losses are notional only, as the central bank is not
in the business of making money. They matter only if they compromise the
ability of the central bank to do its job of controlling inflation in the
future. There are various ways that danger can be avoided, but my point here is
that costs to the central bank can arise with any form of QE.

[2] Central banks routinely pass the profits they make (through
seigniorage)
to governments. So the innovation is that the central bank rather than the
government decides how to disperse this money.

[3] Another objection is that, because the ECB is free to
define its own targets, changing the monetary policy framework to target the
level of nominal GDP would be a better innovation. I agree
this would be a useful innovation. I would argue that it would be better still
to allow countercyclical fiscal policy, because only this can deal with country
specific shocks. But if, for whatever reason, these changes are ruled out, then
a helicopter drop should be implemented. If you are a market monetarist, think
of it as an insurance policy.

35 comments:

The hardest thing of this economic crisis has been trying to keep up with the difference of what people say and what they are in fact doing.

Skidelsky's latest, 'Britain’s Closet Keynesian' Dec 22,2014, hoists Osborne on a Keynesian petard, while the Eurozone in mediamacro land is still the most profligate of spenders, when it has been the most austere.

It is the economic world turned upside down, with fish in the sky and horses pushing carts.

As the ECB will not act, implementing Helicopter Money could - and should - be done directly by the governments, by issuing Tax Credit Certificates and Tax Backed Bonds. Please look at a detailed proposal here http://bastaconleurocrisi.blogspot.it/2014/11/solving-economic-depression-in-eurozone.html

Simon, Like many commentators, I think you’ve missed the basic logic behind imposing deflation or “output gaps” on periphery countries. The logic is that those countries are not competitive compared to Germany, thus to bring periphery costs down, they have to be made to endure a period of inadequate aggregate demand.

Of course it might help a bit if Germany increased its domestic demand and inflation. But Germans just aren’t going to do that.

Using output gaps to deal with lack of competitiveness involves large economic costs (as you point out) and social costs. But that’s common currencies for you. Perhaps the best solution is for Germany to leave the EZ or for one or more periphery countries to leave and set up their own common currency or revert to their national currencies.

The Central Bank operates with a balance sheet, the Treasury doesn't. The Treasury in a sovereign floating fiat currency economy, IS THE CURRENCY ISSUER; it is the only agent that can create (spend) new financial assets (government money / vertical money / "reserves") into existence; and the only agent that can take financial assets out of the economy via taxes / charges etc.

Helicopter money can only be performed by a central bank, if someone is throwing collateral back into the helicopter; its balance sheet has to balance. A central bank can only swap one financial asset for another, a long term interest paying Gilt for the original "reserve" issued to the Central Bank, by the Treasury, when the Treasury first spent the money into existence; money that was subsequently used by someone in the private sector to buy the Gilt.

The Eurozone problem is there is no EU Treasury in charge of fiscal policy. There is no EU Treasury that owns and operates the ECB as its own bank. The UK Treasury and the BoE; The US Treasury and the FED. These Central Banks can't do anything the UK or US Treasury doesn't let them do by statute. In corporate consolidated group account terms, the Treasury and its Central Bank are one and the same entity. (ESA 2010 and WGA Accounts now openly recognise this as fact.)

If you consider the Central Bank to be the "lender of last resort" then a sovereign fiat currency Treasury is the "spender of first resort". This is the fundamental bit of the EU that is missing. In a currency union there can be only one federal Treasury and one federal Central Bank, just like the USA. France; Italy and Greece should leave the Eurozone, go back to using their original currencies and tell the world they MAY pay off some of their Euro debt when things get better.

Your framing (austerity is a wasteful policy) is awesome. Your solution (helicopter money can increase demand and thereby reduce unemployment) is grasping. I'm all for middle class tax cuts; that'll help somewhat; lower oil prices are helping now. What will help the most is reducing unemployment by investing in needed, beneficial infrastructure projects.

Just to be clear (see footnote [3] and my discussion of the UK/US) my preferred solution is fiscal stimulus, which would involve investment of the kind you propose. My point is that if this is ruled out for political reasons, the ECB is not powerless.

This reminds me of something I think I read by Wayne Godley where he seemed perplexed that people considered Thatcher's policies to have "worked". I think he was only considering things from the perspective where the overall level of production was the be all and end all. You seem to be taking a similar position about the current ECB policy. Instead perhaps Thatchers policies were aimed at making our economy a good place to hold savings, and so to entice inward capital flows and so to improve our terms of trade. Thatchers policies perhaps "worked" on those terms. Perhaps the ECB has an even more "conservative" ideal than Thatcher. If they ONLY care about bond holders, then they are doing the right thing. Basically bond holders need the financial impetus towards production to be maintained RELATIVE to the financial impetus towards consumption. The absolute amount of production overall is perhaps less important for them. If half the population is working hard and living frugally and saving and the other half is unemployed and in poverty and consuming nothing then that is nivarna for treasury bond holders. However, if half the population is working hard, living frugally and saving BUT the other half is also working but also consuming a lot so that there is pressure on resources, then things are bad for treasury bond holders.

I really fear that the political economy issues that lead to austerity policies such as those of the ECB will become more and more of an issue as the stock of government debt accumulates:https://directeconomicdemocracy.wordpress.com/2013/03/24/political-consequences-of-risk-free-financial-assets/

I like your footnote 3, but footnotes in blog comments, mmm.Two issues:1. I think you fail to address the issue of monetary offset to fiscal policy, and your need to advocate a single authority controlling monetary and fiscal policy to overcome it.2. How do you address this seeming falsification of your fiscalist advocacy as evidenced by the last chart in this blog?http://thefaintofheart.wordpress.com/2014/12/25/the-unending-fiscal-fetish/

2. I am a macroeconomist, not a fiscalist advocate. Absent monetary offset, theory suggests a G multiplier around 1, not zero. Most econometric studies reach similar conclusions. Given this, why is MM so desperate to show that fiscal policy does not matter. It seems like a phobia. (For more, see https://longandvariable.wordpress.com/2014/07/10/market-monetarist-views-are-a-mish-mash-of-the-good-and-the-silly-that-dont-belong-together-anyway/)

James, sorry if I'm in a muddle with this or stating the obvious but is "Milton Friedman's Thermostat" the answer to that G vs GDP chart?

Isn't Nick Rowe a hero of market monetarism? To quote Nick Rowe:

http://worthwhile.typepad.com/worthwhile_canadian_initi/2012/07/why-are-almost-all-economists-unaware-of-milton-friedmans-thermostat.html"Everybody knows that if you press down on the gas pedal the car goes faster, other things equal, right? And everybody knows that if a car is going uphill the car goes slower, other things equal, right?

But suppose you were someone who didn't know those two things. And you were a passenger in a car watching the driver trying to keep a constant speed on a hilly road. You would see the gas pedal going up and down. You would see the car going downhill and uphill. But if the driver were skilled, and the car powerful enough, you would see the speed stay constant.

So, if you were simply looking at this particular "data generating process", you could easily conclude: "Look! The position of the gas pedal has no effect on the speed!"; and "Look! Whether the car is going uphill or downhill has no effect on the speed!"; and "All you guys who think that gas pedals and hills affect speed are wrong!"And no, you can not get around this problem by doing a multivariate regression of speed on gas pedal and hill. That's because gas pedal and hill will be perfectly colinear. And no, you do not get around this problem simply by observing an unskilled driver who is unable to keep the speed perfectly constant. That's because what you are really estimating is the driver's forecast errors of the relationship between speed gas and hill, and not the true structural relationship between speed gas and hill. And it really bugs me that people who know a lot more econometrics than I do think that you can get around the problem this way, when you can't. And it bugs me even more that econometricians spend their time doing loads of really fancy stuff that I can't understand when so many of them don't seem to understand Milton Friedman's thermostat. Which they really need to understand.

If the driver is doing his job right, and correctly adjusting the gas pedal to the hills, you should find zero correlation between gas pedal and speed, and zero correlation between hills and speed. Any fluctuations in speed should be uncorrelated with anything the driver can see. They are the driver's forecast errors, because he can't see gusts of headwinds coming. And if you do find a correlation between gas pedal and speed, that correlation could go either way. A driver who over-estimates the power of his engine, or who under-estimates the effects of hills, will create a correlation between gas pedal and speed with the "wrong" sign. He presses the gas pedal down going uphill, but not enough, and the speed drops."

So basically the level of government spending increases (perhaps as an automatic stabilizer) in response to or to head off problems in the economy.

"many Keynesians predicted disaster from austerity in the US. And say the same would happen in the UK."And they were right for the UK, which compared to the US imposed far wider/deeper austerity, which helps to explain why the US returned to its pre-crisis GDP level years ahead of the UK, whose economy stagnated from mid 2010 for approximately 2 years thanks in large part to this government's austerity policies (and also other external factors of course) which the OBR has calculated cost the UK economy over £100bn in lost output. Other notable studies come to a similar figure on the enormously damaging impact of austerity.Are you suggesting that austerity hasn't been economically disasterous for the UK?

There's a point here that in a lot of ways austerity in the UK was (relatively speaking) light, we had a VAT rise and various departmental and benefit cuts but there were also measures like the raising of the tax threshold which was a massive tax cut.

A more severe, obvious example of austerity would be Greece or Ireland and here the results are much more obvious.

Simon. Judging by debt to GDP the US has had far more austerity than the UK. If you think we should be more like the US then more austerity would have been better. No? In fact, the UK plans for austerity but doesn't deliver it.

Arguably, the real reason for the superior performance of the U.S. is its superior monetary policy. More aggressive unconventional policy, and earlier. We had old Mervyn King in place ready to tighten policy at the drop of a hat, and expectations knew it. Not until Carney was appointed did we have monetary policy in properly responsive hands, and expectations adjusted immediately for that, too.

Still waiting for your answer on the independence of the central bank and whether the Treasury should control both, to avoid the observed fact of monetary offset.

And still waiting to know the basis for your constant optimism over the effectiveness of G.

Just to clarify, I'm not the host 'Simon' of this post, but reading your first two paragraphs your notion/understanding of how to gauge how much austerity has taken place and which country has done more appears to be completely lacking, as various studies and data sources clearly illustrate over the past few years. Our host explains one way very clearly referring to the IMFs data some 2 years ago here...note the extent of austerity and cuts to G expenditures for UK and USA here: http://mainlymacro.blogspot.co.uk/2012/10/different-approaches-to-austerity.html

Its also helpful to note thata) You can't and don't gauge how much austerity has taken place by looking at debt to GDP ratios!b) The chart you refer to and conclusions drawn from it, as our blog host indicates above, is nonsensical, as Robert Waldmann explains in full here… http://angrybearblog.com/2014/12/g-and-gdp-during-the-current-recovery.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Hzoh+%28angrybearblog.com%29

Simon. Happy New Year!Thanks for clearing up my two Simon's confusion.

That 2012 blog seems to say that a tax rise/spending cuts mix is less bad than a spending cuts only attack on the deficit. Whatever. I wouldn't mind tax rises if the G/GDP ratio were as low as it is in the US. Low G worldwide is associated with higher GDP per capita. Bring it on!

That Angrybear blog is indeed angry, but mostly seems to get tied up in R-squared chaos and misses the wood for the trees. His main chart shows Real G falling and RGDP rising. It shouldn't have happened according to Keynseian predictions, but it did. It's a good falsification of those predictions, the theory should fail, too. Move on.

1. Because it is observed all over the world. It's a fact. Why does it happen? Because central banks are independent of governments. They will tighten, ZLB or no ZLB. I asked you who will order them to act against their mandate?

2. If G was not prone to failure then the multiplier might be 1, although there is always the question of it being permanent or temporary to mess the theory up.But G failure is as common as market failure, arguably more common. Why the constant optimism about the effectiveness of G? Not the realm of macro, I suppose?

Many MM's favour fiscal policy, like employer and employee NI cuts, do you?

1) At current very low levels of inflation (US 1.3%, EZ 0.3%, UK 1%) most central banks could happily keep their monetary policy instruments loose despite fiscal stimulus and still keep within their 2% inflation mandate. At the point the CB needs to tighten we should be off the ZLB anyway. There's a wider debate on the nature of the mandate and whether 2% inflation is really the best target (I don't think it is).

2) There are plenty of ways of raising G that are very reliable ways of generating additional economic output. The overall societal usefulness of this output may be questionable, but that (as you imply) is a political judgement. The point here is that the other two components of output: consumption and investment, can't be directly controlled, only persuaded. Tax cuts would also work, although we can't be sure what %age of any tax cut might be saved.

Sure GDP = C + I + G, but think about it for a while. What stops you just increasing G forever and holding C and I constant. Good things? Or a collapsing economy? You have to tell me what level of G is optimal before naively arguing for it to go up as a solution to recessions.

Whatever the merits or demerits of this, it is clearly unlawful for the ECB to behave in such a way.

Far from "circumventing" the ECB's legal inability to engage in QE (and the legal position is not uncertain:it is unlawful), it is obviously ultra vires the ECB to just write everyone a cheque.

Academic in the bad sense.

Trying to be practical, what needs to be done is to get agreement on changing the fiscal rules, and concerted action by the rest of the EU to get Germany to accept higher inflation. The ECB is not an able institution, but it is constrained in practice.

Re writing everyone a cheque being illegal, the fact that something is currently illegal is not a good argument against it if it can be shown that it in fact benefits the community as a whole: in which case it should be legalised.

Re getting Germany to accept higher inflation, I agree that would probably help, regardless of whether stimulus was monetary or fiscal.

1. If you read S W-L's post it criticese EU policymakers, specifically at the ECB. If what they are being criticised for not doing cannot lawfully be done (and it cannot) then the criticism is unfounded.

2. Could the law be changed? As a matter of political reality it seems very unlikely to me. I cannot imagine that Germany or indeed most member states would agree to the ECB having such a power.

3. Should the law be changed? Here we come to a repeated problem with the views of S W-L (and indeed yourself). Should an undemocratic institution like the ECB have the power to give out cash in this way? Even if we thought it a good idea in economic terms, the answer is obviously no. The distributional questions of who gets what needs to have political legitimacy.

S W-L says many serious and sensible things about the failure of the ez. This post isnt one.

Prof. Wren Lewis is even venturing to criticise the great "independence of Central Banks shibboleth" . The capture of monetary policy by vested interests has been facilitated by this bogus "independence". We will not have welfare positive policy until we re-introduce public accountability....

Sorry, but from my point of view of a dismal economist, there is not free lunch in economy :-(The helicopter will not throw only "food checks" (and moral hazard), same time it will destroy prices' anchorage, value of the money and people's will to improve the assignation of eonomic resources. The eurozone crisis is not caused by the monetary policy and the monetary policy is not the solution. Monetary policy is like a bridge, but the cliff to be saved could be too wide for the ECB. The answer is not in Frankfurt, it is in Strasburg, Brussels and the rest of capital cities in the eurozone

Your post makes clear that you are seriously in need of a longish rest.

Three years ago, you started your blog in a very promising manner. Your willingness to discuss public debt as a burden for future generations indicated an open mind. The unassuming clarity of your style was a further attraction - not as entertaining as Paul Krugman, but easier to take seriously (but, as time has shown, equally wrong).

And now this hyperventilating post, seriously recommending helicopter money if fiscal stimulus is not forthcoming, even if that means breaking the law...or was it a practical joke?

Not long ago, Frances Coppola declared that your Chicago colleague John Cochrane had lost his marbles. Fortunately, she is an ideological friend of yours - just imagine what she might have said about you if she wasn't.

It seems to me that helicopter money is unlikely to amount to anything more than a glorified tax break. Muellbauer talks about amounts in the region of EUR 500. Even in poorer member states, how much is such a small amount likely to increase aggregate demand? Not much, I expect. It's not going to reduce high debt levels by much. Equally, it's not going to go a long way on the consumer front. Divorced from more comprehensive efforts to increase demand, and wider structural reforms (primarily aimed at improving institutional quality, rather than deregulating per se), helicopter money isn't going to be anything more than a flash in the pan, at best.

Well, there was a Democratic revolution started in Portugal, Ireland, Greece and Spain back in 2001. Within 7 years nominal unit labour costs had risen as follows (2008 over 2001) :Germany 0,69%Ireland 30,64%Greece 27,06%Spain 25,74%Portugal 14,61%Current account in 2008 stood at :Germany 5,8%Ireland -6,3%Greece -16,3%Spain -9,2%Portugal -12,6%It is pretty clear that democracy can lead a country into pricing itself out of the world market. Whether it can stay there for long is another matter. But I doubt Trichet or anyone else, outside those countries that take that self-destructive option, can be blamed.Even today, unit labour costs, relative to the start of the euro are as follows (2014 over 2001) :Germany 14,08%Ireland 17,74%Greece 21,53%Spain 21,11%Portugal 13,23%So, the Greeks do not seem to have had it so bad. Once those figures get known a bit more widely, we can wonder about the Democratic revolution starting in Germany and claiming all that helicopter money, rather than wasting it on early pensions in Greece or hiring even more stamp-setting public sector employees in the same country.

It is worth looking into capital costs, too, in the Eurozone problem-countries. Capital costs seem to have been at their lowest ever, so much so as to facilitate a trend in investment away from tradeables and into non-tradeables, thus further worsening the current account. Here are two references, one more technical, the other more readable :https://unofficialdimioannou.wordpress.com/2013/09/07/greece-victim-of-excessive-austerity-or-of-credit%E2%80%91induced-turbo%E2%80%91charged-dutch-disease/https://unofficialdimioannou.wordpress.com/2013/04/18/stories-about-defaults/Another important factor that led to the present ruin is the sharp rises in spending on (mainly social) transfers in the said countries (2008 over 2002).Germany 4,7%Ireland 53,7%Greece 61,4%Spain 41,5%Portugal 29,8%that cannot be reversed much any more, given the present humanitarian crisis (2014 over 2002) :Germany 17,2%Ireland 59,8%Greece 38,2%Spain 56,0%Portugal 40,8%There were, also, reforms to reduce inequality :http://www.alternatives-economiques.fr/pics_bdd/article_options_visuel/A300013A.GIF( drawn from here :http://pratclif.com/economy/alter-eco/modele-allemand.htm )that do not seem to have exactly succeeded.It is too easy to blame Trichet for all this and claim that Democracy gets assaulted. It is especially dangerous to make scapegoats of the leaders in those countries, too. It was (and is) extremely difficult to shift public opinion while the going was good. - See more at: http://angrybearblog.com/2015/01/trichet-v-democracy.html#comment-2544333

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